{"id":567,"date":"2015-05-07T04:14:49","date_gmt":"2015-05-06T23:14:49","guid":{"rendered":"https:\/\/nohasslelistingblog.com\/?p=567"},"modified":"2015-05-07T04:14:49","modified_gmt":"2015-05-06T23:14:49","slug":"demand-is-back-to-normal-whatever-normal-is","status":"publish","type":"post","link":"https:\/\/nohasslelistingblog.com\/?p=567","title":{"rendered":"Demand Is Back to Normal (whatever Normal is?)"},"content":{"rendered":"

\"Travis<\/a>After a year and a half of the real estate market being in the doldrums \u00e2\u20ac\u201c low supply and low demand \u00e2\u20ac\u201c demand has fully corrected. In fact, demand is now in a \u00e2\u20ac\u0153normal\u00e2\u20ac\u009d range.\u00c2\u00a0 Supply however, has failed to follow.\u00c2\u00a0 In fact supply is down about 15% from last year.\u00c2\u00a0 That is great news for sellers.<\/p>\n

In the last 2 weeks of February, demand finally began increasing.\u00c2\u00a0 That increase appeared to primarily come from first time home buyers.\u00c2\u00a0 Even that picture has shifted a bit, and now demand is largely coming from the move up buyers.\u00c2\u00a0 This move up buyer has allowed improvement in higher price points as well as in most geographic areas. In real estate, this is the \u00e2\u20ac\u0153trickle up theory\u00e2\u20ac\u009d \u00e2\u20ac\u201c that improvement begins in the lower price ranges and migrates upwards.\u00c2\u00a0 If demand remains strong, and supply continues to be constrained, then with time, prices follow.<\/p>\n

Supply and demand trends tend to follow certain patterns, ultimately adjusting with the effect of coming in to balance.\u00c2\u00a0 For example, when supply stays low but demand accelerates, the first signs of the shift are multiple offers \u00e2\u20ac\u201c often pushing contract prices above listing prices.\u00c2\u00a0 Then the appraisals begin to come in \u00e2\u20ac\u0153low\u00e2\u20ac\u009d (as rising prices are not supported by historical prices) often forcing sellers to accept less and thereby artificially holding down prices.\u00c2\u00a0 Eventually enough demand creates buyers who will pay above appraisal or enough attractive cash offers, and prices begin their climb.\u00c2\u00a0 Higher pricing then encourages more sellers to come to market, and as supply builds price appreciation moderates. Supply and demand then are brought back in to balance.<\/p>\n

Where are we currently in this cycle?\u00c2\u00a0 At the moment, we are seeing multiple offers with contract pricing pushing upwards, only to be depressed by low appraisals.\u00c2\u00a0 If this trend continues, we likely will see price increases in the next few months.
\nSumming up the market shift is our favorite guru, Michael Orr of the Cromford Report:<\/p>\n

Now we are fully into the height of the prime selling season it is becoming clear that it is not the first time home buyer who is making the biggest impact. It is the move up price ranges that are doing best compared with last year.
\nHere are the price ranges which have growth dollar volume the most between March 2014 and March 2015:<\/p>\n

1.\u00c2\u00a0\u00c2\u00a0\u00c2\u00a0\u00c2\u00a0\u00c2\u00a0\u00c2\u00a0 $350K-$400K – up 46%
\n2.\u00c2\u00a0\u00c2\u00a0\u00c2\u00a0\u00c2\u00a0\u00c2\u00a0\u00c2\u00a0 $300K-$350K – up 40%
\n3.\u00c2\u00a0\u00c2\u00a0\u00c2\u00a0\u00c2\u00a0\u00c2\u00a0\u00c2\u00a0 $500K-$600K – up 40%
\n4.\u00c2\u00a0\u00c2\u00a0\u00c2\u00a0\u00c2\u00a0\u00c2\u00a0\u00c2\u00a0 $275K-$300K – up 28%
\n5.\u00c2\u00a0\u00c2\u00a0\u00c2\u00a0\u00c2\u00a0\u00c2\u00a0\u00c2\u00a0 $200K-$225K – up 26%
\n6.\u00c2\u00a0\u00c2\u00a0\u00c2\u00a0\u00c2\u00a0\u00c2\u00a0\u00c2\u00a0 $800K-$1M – up 26%
\n7.\u00c2\u00a0\u00c2\u00a0\u00c2\u00a0\u00c2\u00a0\u00c2\u00a0\u00c2\u00a0 $250K-$275K – up 26%
\n8.\u00c2\u00a0\u00c2\u00a0\u00c2\u00a0\u00c2\u00a0\u00c2\u00a0\u00c2\u00a0 $175K-$200K – up 24%
\n9.\u00c2\u00a0\u00c2\u00a0\u00c2\u00a0\u00c2\u00a0\u00c2\u00a0\u00c2\u00a0 $2M-$3M – up 23%
\n10.\u00c2\u00a0\u00c2\u00a0\u00c2\u00a0 $600K-$800K – up 21%
\n11.\u00c2\u00a0\u00c2\u00a0\u00c2\u00a0 $400K-$500K – up 21%<\/p>\n

All ranges below $125,000 are delivering lower dollar volume than last year and so are the ranges over $3 million and between $1.5 million and $2 million.
\nThe mid range and the lower luxury ranges are where we are seeing the most strength and this is in stark contrast to last year.<\/p>\n

All in all, encouraging news for most sellers.\u00c2\u00a0 After a year and a half, it\u00e2\u20ac\u2122s nice news to report.<\/p>\n","protected":false},"excerpt":{"rendered":"

After a year and a half of the real estate market being in the doldrums \u00e2\u20ac\u201c low supply and low demand \u00e2\u20ac\u201c demand has fully corrected. In fact, demand is now in a \u00e2\u20ac\u0153normal\u00e2\u20ac\u009d range.\u00c2\u00a0 Supply however, has failed to follow.\u00c2\u00a0 In fact supply is down about 15% from last year.\u00c2\u00a0 That is great news […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3,4],"tags":[],"class_list":["post-567","post","type-post","status-publish","format-standard","hentry","category-home-values","category-market-stats"],"_links":{"self":[{"href":"https:\/\/nohasslelistingblog.com\/index.php?rest_route=\/wp\/v2\/posts\/567","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/nohasslelistingblog.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/nohasslelistingblog.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/nohasslelistingblog.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/nohasslelistingblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=567"}],"version-history":[{"count":1,"href":"https:\/\/nohasslelistingblog.com\/index.php?rest_route=\/wp\/v2\/posts\/567\/revisions"}],"predecessor-version":[{"id":569,"href":"https:\/\/nohasslelistingblog.com\/index.php?rest_route=\/wp\/v2\/posts\/567\/revisions\/569"}],"wp:attachment":[{"href":"https:\/\/nohasslelistingblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=567"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/nohasslelistingblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=567"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/nohasslelistingblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=567"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}